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Obama Urges Mortgage Market Overhaul

8/6/2013 4:06PM

President Obama is expected to lay out his vision for housing policy that involves two competing goals: getting more private capital to reenter a tough mortgage market while maintaining homeownership opportunities for middle-class borrowers. Nick Timiraos reports. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... the the ... now the president is just on saw this Taking and Finisar asana about his ... housing plan let's listen to what he says ... one ... the ... Saul ... Saul last two weeks I've been visiting towns all across the country ... talking about what we need to do ... to surge or a better bargain for middle-class ... a national strategy to make sure ... that everybody works hard at the chance to succeed him twenty percent rate on ... and a Iban people in Arizona especially understand the challenges that are out there because ... for the past for many years ... together we fought our way back from ... a devastating recession ... the cost ... millions of jobs for Americans ... it's a lot of folks lost their homes lot of folks lost their savings ... and what the recession showed was ... that the wall erosion ... of middle class security that event taking place for decades ... well we bought ... we took ... on the broken healthcare system ... we took on the housing market was in freefall ... we invested in new technologies to reverse our addiction to foreign oil ... we change the tax code to become ... tilted ... below but too much in favor of the wealthiest Americans at the expense of working fam ... the ... Obama told me not whine our allies in Phoenix Arizona ... laying out his housing policy vision involves two competing goals for goals and can What Nick ... Timiraos The will Street dolls with us but best joins us now Sam thanks for being here ... aam ... housing of course long associated with the American dream from all all presidents of come out ... with ideas of ... how to make housing affordable how to get people ... on the way of what is he trying to do now ... well today is the isthe is not talked about housing for someone a very long time now ... relieved after the bank more than a year ago ... so it's been it's been a tough issue to talk about with them talk to issue ... that today he's he's talking about Fannie Mae and Freddie Mac among other things and that the too big to ALM and government sponsored enterprises that buying mortgages to help fuel a mortgage market right right and so the government had to bail thinning Friday out five years ago and we still haven't decided what we're going to do with these companies ... they're just kind of improvement or either wards of the state and so ... he's coming out and saying here's who wish to do going forward ... this is a very heated topic and Congress we paddled of ... fiery debate ... when back at least a decade and it's a really important sector the economy the more territory and or sector the economy so what ... what he's ... proposing today to do is send is that ... essentially take it to replace Fannie and Freddie ... with some new system or the government would provide a limited federal backstop of mortgages so that ... investors will continue to fund ... the thirty year fixed rate loans that Americans of common online ... and that might be harder to have the widely available ... with Alex on federal guarantee it ... is also going to come and say we need to have a lot more private capital ahead ... of any guarantee so for going to have a guaranteed on like the past four was kind of an implied fuzzy guarantee it should be explicit ... they should have to pay for or are these new mortgages were two cents a minute or pay for insurance than sell the same way that things have to pay for FDIC insurance camps of which empowers this covers paying deposits minimize bank runs ... the kind of had a mortgage rotten in two thousandseven two thousandeight when investors fled from the mortgage backed securities market ... they would only buy securities of the federal guarantee so this is some way to kind of ... try to bring some work to a market ... that ... lost its way and the on the other thing he wants more people to on the hops right that that part of the ADA's family's make it ... within reach great and I think if you read the president's speech today there's a lot of interesting new once in a note in the past oh so was everybody should own home now and now when we will we've already learned that's not what it says that should be ofgold perhaps but we recognize that not everybody ... some people are going after I can so there's a there's emphasis in the speech on renting their synthesis in the speech on ... not having ... a kind of on he says my grandfather a state with ... no a house some more you've lived it wasn't something flat ... and so this idea that we should get away from federal policy steering people ... to take risks of excessive risks in in the housing market ... so what one other things ... and here is that that the fixed rate mortgage is something that people really like in a modern country with the baton of a federal Cohen acted like that back so ... aam of of the road belongs flops ... right so as soon as the good bit of the binding and puts interest rates up ... the new mortgage what goes up quickly and that doesn't happen and ... present something that the the US um economy might need to get use to ... what if we want to have federal guarantees a mean we really should have that debate about what kind of mortgage market we want to if we want to have more on this until school re floating rate mortgages ... and who's gonna make those phones and all those phones in open water European countries that ... won't do this a consolidated banking sector and so a lot of loans are held by a ... smaller number of really too big to fail banks and we saw that in some of the western European countries if ... they set to step in and provide ... federal guarantees ... to their ... largest banks because that's where all the mortgages war ... and you know we've we've ... done things differently here we did federal backstops instead to ... Fannie Mae and Freddie Mac have them we have to ... back up off the backs of deep to find a man from a setback when we bought an umbrella anyway ... interesting stuff aam still be a great week tomorrow thank you very much miss sounds